Volvo Cars is planning to set up a new joint venture technology company with Geely Holding, a Chinese car group, to share existing and future technology, deepen industrial synergies, and provide the economies of scale to rapidly develop next-generation electrified vehicle technology.
According to a memorandum of understanding signed yesterday, Volvo Cars, Geely Auto and LYNK & CO will share vehicle architecture and engine technologies via cross licensing arrangements of technologies managed by the new joint venture. The companies will also cooperate by commonly sourcing components and cutting procurement costs.
As reported, the new joint venture will be 50/50 owned by Volvo Cars and Geely Holding and will be headquartered in China with a subsidiary in Gothenburg, Sweden.
“Partnerships to share know-how and technologies are common practice in the automotive industry. This is the model we are adopting,” says Håkan Samuelsson, president and chief executive. “This planned collaboration will strengthen Volvo’s ability to develop next-generation electrified cars.”
Volvo Cars says it already shares technology with Geely – most notably, the compact modular architecture, which is being used by Volvo Cars for its soon-to-be-announced smaller range of 40 series cars and by LYNK & CO.
Under the joint venture agreement, the intellectual property rights for the technology to be shared will remain with the company that developed it, but the technology itself will be available for use by Volvo, Geely Auto and LYNK & CO, via license agreements.
According to Volvo, the collaboration is expected to also cover electrified vehicle components, such as battery cells, e-motors and charging systems, in order to maximize synergies across the group.
“We will unlock significant benefits across our portfolio by sharing both technologies and next-generation vehicle architectures,” says Li Shufu, chairman of Geely Holding. “I am confident these synergies can be achieved while preserving the separate identities and strategic autonomy of our different automotive brands.”
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